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IS UNABSORBED DEPRRECIATION CAN BE SETOFF FROM SALARY OR NOT

CA Balram Sharma (CA) (839 Points)

04 November 2009

CAN UN ABSORBED DEPRECIATION CAN BE SETOFF UNDER THE HEAD SALARY AND NOT.

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61 Replies

NITIN SADEKAR (PROPRIETOR) (22 Points)
Replied 04 November 2009

No, unabsorbed depreciation can not be setoff from salary

RAVI KUMAR M (CHARTERED ACCOUNTANT) (66 Points)
Replied 04 November 2009

Section 32(2) states that where the depreciation cannot be set off against the profits and gains chargeable to tax, then it could be set off against income under other heads. If the incomes under other heads are not sufficient to absorb the same, then the ‘unabsorbed depreciation’ has to be carried forward to subsequent year for set off.

However, whether it could be set off against salary income is a matter of debate, in view of the Section 71(2A). Though the law prevents only the set off of business loss against salary income and not depreciation.

(Guest)

Agree with Mr.Nitin...

Unabsorbed Depreciation can't be set off against the income chargeable under the head "Salaries"...neither in the current year nor in subsequent years.i.e.,not even then if unabsorbed dep.is carried to the subsequent years.

CA Dhiraj Ramchandani (CA, M. com) (10823 Points)
Replied 04 November 2009


"	Unabsorbed Depreciation can't be set off against the income chargeable under the head "Salaries"...neither in the current year nor in subsequent years.i.e.,not even then if unabsorbed dep.is carried to the subsequent years.	"

CA Trinath Galla (student) (3130 Points)
Replied 04 November 2009

unabsorbed depriciation cannot be set-off against salary income w.e.f A.Y 2005-06.

it can be carried forward for indefinite period and set off against any other income other than income chargeable under the head salaries.

CA Trinath Galla (student) (3130 Points)
Replied 04 November 2009

It is mentioned that unabsorbed depreciation can be set-off against any other income other than income chargeable under the head salries.

now my doubt is whether it can be set-off against winnings from lotteries, crossword puzzles etc..??? as these incomes are taxable irrespective of the income levels of the concerned assesse, are they elgible for giving relaxation against unabsorbed depreciation????

it is no where mentioned that they can not be used for setting off losses or even unabsorbed can not be set-off against that incomes....

so can we set-off or consider it as a laccunae????

(Guest)

As per sec58(4),while computing income by way of winnings from lotteries,crossword puzzles etc...deductions which are not permissible constitute----

1.deduction under sec 57---including unabsorbed dep. under sec 32(2).,

2.losses under sec 70,71 &72,

3.deduction under sec.80C to 80U..

So,accordingly it can be concluded that unabsorbed dep. can't be set off against these incomes.

CA Trinath Galla (student) (3130 Points)
Replied 04 November 2009

Originally posted by :neha jain
"	As per sec58(4),while computing income by way of winnings from lotteries,crossword puzzles etc...deductions which are not permissible constitute---- 1.deduction under sec 57---including unabsorbed dep. under sec 32(2)., 2.losses under sec 70,71 &72, 3.deduction under sec.80C to 80U.. So,accordingly it can be concluded that unabsorbed dep. can't be set off against these incomes.	"

ya if it mentioned so, it can not be set-off.

neha can u pla mention wer have u read dat?

1 Like

(Guest)

read sec 58(4)....

Max Payne (employed) (2569 Points)
Replied 04 November 2009

Originally posted by :Trinath
"	It is mentioned that unabsorbed depreciation can be set-off against any other income other than income chargeable under the head salries. now my doubt is whether it can be set-off against winnings from lotteries, crossword puzzles etc..??? as these incomes are taxable irrespective of the income levels of the concerned assesse, are they elgible for giving relaxation against unabsorbed depreciation???? it is no where mentioned that they can not be used for setting off losses or even unabsorbed can not be set-off against that incomes.... so can we set-off or consider it as a laccunae????	"

Dear Trinath, u can see section 58(4), which says that

"In the case of an assessee having income chargeable under the head “Income from other sources”, no deduction in respect of any expenditure or allowance in connection with such income shall be allowed under any provision of this Act in computing the income by way of any winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature, whatsoever :

Provided that nothing contained in this sub-section shall apply in computing the income of an assessee, being the owner of horses maintained by him"

Hence u cant claim unabsorbed depreciation against such incomes